The Australian share market could continue to gain momentum in the week ahead after closing on Friday at a two-week high as investors came in from the sidelines, analysts said. For the week ending November 28, the benchmark S&P/ASX 200 rose 326 points, or 9.5 percent, to at 3,742.5.
James Foulsham, head of trading at CMC Markets in Sydney, said it was possible that the positive mood could continue next week. "I think there are people starting to have a serious look at some stocks and trying to maybe pick a bit of a bounce," he told AFP.
Foulsham said with announcements likely to slow down in the lead-up to the end of the year, some investors were "anticipating a little bit of a recovery". "Things have definitely settled down a little this week and I think it's probably going to be reasonably similar next week," he said.
"There's definitely still some issues there but I think for two or three weeks there was really a sort of panic and that's sort of subsided."
Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said the uncertain economic outlook meant it was "too early to say for sure whether the bounce in shares over the last week or so is just another dead cat bounce or something more sustainable." But he said there was a good chance shares will rally towards the end of the year as they are still very oversold and government policy action around the world could help boost confidence. "While all the activity by governments around the world to get their financial markets working again and stimulate their economies won't head off the recession, which is already in train, it does provide confidence that there will be an eventual economic recovery," he said. "Quite clearly a re-run of the downwards spiral of the 1930s will not be allowed."
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